Business Licencing Reform and Gender Equality: Evidence from Indonesia

Abstract

Business environment reform targets inadequate business regulations, intending to remove constraints to business investment, enabling growth and job creation, and creating opportunities for international business to contribute to and benefit from this growth. Women-led businesses are likely to be disproportionately negatively affected by a poor business environment. However, there is a dearth of context-specific knowledge of the impact of business environment reform on gender equality. This paper offers new insights into this relationship through an in-depth analysis of the Pelayanan Terpadu Satu Pintu (PTSP) or one-stop shop business licencing reform in 2009, exploiting the variation in the extent of its implementation to examine how the effects vary, focussing on the gender of firm leadership. Our findings suggest that the reform is unlikely to have led to either unintended negative consequences for women-led firms, nor do we find any evidence of transformational change. Outside Jakarta, advances for women were achieved, while in Jakarta existing exclusions were maintained and arguably deepened. Stronger gender and inclusion outcomes would require further deepening and expanding the positive achievements identified, including general business environment improvements coupled with targeted support for sectors.